Exhibit 4.(c)10
Agreement dated December 17, 2002
between the Registrant and Carmel V.C. Ltd.
relating to the services of Xxxxxx Xxxxxx.
AGREEMENT
THIS AGREEMENT (this "Agreement"), is entered into as of December 17,
2002, by and between ECI Telecom Ltd., an Israeli company (the "Company"), and
Carmel V.C. Ltd., an Israeli company (the "Service Provider").
W I T N E S S E T H:
WHEREAS, pursuant to Article 37(h) of the Company's Articles of
Association, subject to certain conditions, certain shareholders of the Company
have the right to appoint a director to the Company's Board of Directors (the
"Board") and to propose that he or she be appointed as the Company's Vice
Chairman;
WHEREAS, Xx. Xxxxxx Xxxxxx ("Dovrat"), a consultant and director of the
Service Provider, has been appointed as the Company's Vice Chairman pursuant to
the foregoing procedure; and
WHEREAS, the Company and the Service Provider wish to set forth the
terms and conditions of the consulting services provided by the Service Provider
to the Company (the "Services").
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions and Interpretation
1.1. The titles used in this Agreement are for convenience only and
are not to be considered in interpreting this Agreement.
1.2. The recitals to this Agreement constitute an integral part
hereof.
2. Undertakings of the Service Provider
The Service Provider hereby undertakes to the Company as follows:
2.1. The Services to be provided by the Service Provider hereunder
shall be performed exclusively by Dovrat. Dovrat shall have
the duties and responsibilities customarily performed by a
director and vice chairman of an Israeli company.
2.2. In addition, the Services shall include ongoing and
comprehensive consulting regarding the Company's affairs and
promotion of the Company's business. In carrying out the
Services, Dovrat shall comply with the directives of the
Board.
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2.3. The Service Provider shall devote to the Company's affairs the
time necessary for the proper performance of the Services.
3. Remuneration
3.1. In consideration for the performance of the Services
hereunder, the Company shall pay the Service Provider service
fees in the amount of US$300,000 per year, plus applicable VAT
(the "Service Fees").
3.2. The Service Provider shall deliver an invoice to the Company
for the Service Fees on the first business day of each
quarter. The Company shall pay the invoice no later than
fifteen days following the receipt of the invoice, and the
Service Provider shall deliver a tax receipt to the Company
within five business days following receipt of payment of each
invoice. VAT shall be added by the Company to payments
mentioned herein in accordance with applicable law.
3.3. Subject to approval under applicable law, the Company shall
grant to the Service Provider options to purchase up to
300,000 ordinary shares of the Company (the "Options"), at an
exercise price per share equal to the closing price of the
Company's ordinary shares on the Nasdaq Stock Market on the
trading day immediately preceding the day on which the Board
approves this Agreement.
3.4. The Options shall be granted under the Company's share
incentive plan and be governed by the terms thereof. The
Options shall be granted pursuant to Section 3(9) of the
Income Tax Ordinance (New Version), 5721-1961, as amended.
3.5. 50% of the Options shall vest and be exercisable upon the
approval of the Company's shareholders, and the balance shall
vest and be exercisable on the first anniversary of such
approval.
3.6. VAT shall be paid by the Company to the Service Provider in
respect of the grant of Options in accordance with applicable
law within fifteen business days of the approval of this
Agreement by the Company's shareholders. For such purpose, the
value of the Options shall be agreed by the parties. The
Service Provider shall deliver a tax receipt to the Company
within five business days following the payment thereof.
3.7. The Company will arrange "Directors and Officers" insurance
coverage for Dovrat with respect to risks inherent in carrying
out the Services. The Company will undertake to indemnify
Dovrat to the highest extent of the indemnification of the
Company's other Directors and Officers in accordance with
applicable law.
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4. Term of the Agreement
4.1. The term of this Agreement shall commence on January 1, 2003,
and, subject to the provisions below, shall remain in effect
for an indefinite period.
4.2. Each party shall have the right to terminate this Agreement,
for convenience, by providing ninety (90) days' prior written
notice to the other party.
4.3. Notwithstanding the foregoing, the Company may terminate this
Agreement immediately upon written notice in any of the
following circumstances:
4.3.1. The Service Provider is not able to supply the
Services hereunder by Dovrat exclusively due to (i)
Dovrat's resignation, retirement or removal from his
position as the Company's Vice Chairman or (ii)
Dovrat's inability to provide the Services, for any
reason whatsoever, for a period exceeding sixty (60)
consecutive days, including Dovrat's disability or
death.
4.3.2. If an official receiver is appointed for the Service
Provider and/or for its assets or any part thereof,
or if an application for the appointment of a
receiver and/or administrator or a liquidator or a
temporary liquidator or a trustee or any other
official appointment is filed, or if an application
for liquidation or an application for bankruptcy is
filed against the Service Provider, or if a receiving
order or a liquidation order is given against the
Service Provider, or if the Service Provider is
declared bankrupt, or if the Service Provider reaches
an arrangement with its creditors, and such
appointment, application, order, declaration or
arrangement is not revoked within thirty days.
For the avoidance of doubt, in the event of the termination of this
Agreement in accordance with this Section 4, neither the Service
Provider nor Dovrat shall be entitled to any compensation or payment of
any kind from the Company, except for fees accrued prior to
termination.
5. Relationship between the Parties
5.1. The Service Provider hereby acknowledges that this Agreement
is an agreement for the provision of consulting services and
does not create an employer-employee relationship between
either the Service Provider or Dovrat, on the one hand, and
the Company, on the other hand, and does not confer upon
either of them any rights save for those set forth herein.
5.2. The Service Provider hereby agrees to indemnify the Company,
upon its first demand, for all reasonable expenses that may be
incurred by it in respect of or in connection with any tax,
social charge, contribution based on, or any claim asserting,
the existence of an employee-employer relationship between the
Company and Dovrat, including all reasonable attorneys' fees.
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5.3. The Service Provider hereby represents and warrants that it is
not prohibited by any law, regulation, commitment or agreement
from entering into or performing its obligations under this
Agreement and that Dovrat is likewise not prohibited from
performing the Services.
5.4. The Service Provider hereby undertakes, and shall ensure that
Dovrat undertakes, to the Company, including its affiliates
and subsidiaries (for the purposes of this Section 5.5, all of
such affiliates and subsidiaries are included within the term
the "Company"), to maintain in complete confidence the
Company's confidential information, and not to disclose to any
person or entity such confidential information, except as
required for the performance of the Services hereunder. This
undertaking shall apply to the Service Provider and Dovrat
during the term of this Agreement and thereafter.
6. Miscellaneous
6.1. Unless otherwise expressly provided in this Agreement, the
Service Provider shall bear all the tax liabilities in respect
of any benefit of any kind that is given by the Company
pursuant to this Agreement.
6.2. This Agreement constitutes the entire agreement between the
parties hereto, and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the
parties with respect to the subject matter hereof.
6.3. Neither this Agreement, nor any right or interest hereunder,
shall be assignable or transferable, without the prior written
consent of the other party.
6.4. No delay, or omission in exercising any right, power, or
remedy accruing to any party upon any breach or default by the
other under this Agreement shall impair any such right or
remedy, nor shall it be construed to be a waiver of any such
breach or default, or any acquiescence therein or in any
similar breach or default thereafter occurring.
6.5. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when
personally delivered or faxed (with confirmation of
transmission) or three business days after having been sent by
registered mail, return receipt requested, postage prepaid,
addressed to the parties at their respective addresses last
given by each party to the other.
6.6. This Agreement shall be governed by the laws of the State of
Israel.
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6.7. The competent courts located in Tel Aviv, Israel shall have
exclusive jurisdiction over any action arising out of or
relating to this Agreement, and each of the parties hereby
irrevocably submits to the exclusive jurisdiction of such
courts.
6.8. The provisions of this Agreement shall be deemed several and
the invalidity or unenforceability of any provisions shall not
affect the validity or enforceability of the other provisions
hereof.
6.9. This Agreement may be signed in multiple counterparts, which
together shall be deemed one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their authorized signatories as of the date first above
written.
ECI TELECOM LTD. CARMEL V.C. LTD.
By: /s/Xxxxx Xxxxx By: /s/Xxxxxx Xxxxxx & /s/Avi Zeevi
